Archives for October 2012

As of this writing, Hurricane Sandy has caused widespread devastation. Eight states have been declared federal emergency areas and the destruction is extending to states in the Midwest. The toll in human life and property is heartbreaking.

While Friday and Saturday’s Breeders’ Cup races will take place nearly three thousand miles away from the East Coast, in Los Angeles, the event is likely to be negatively affected by the weather.

First, if power is off for a week to ten days in some of the population centers in the Eastern United States, betting will be down. Even if people have telephone service, they are unlikely to be in a mood to handicap horse races.

Second, power outages and psychological distress are apt to diminish the number of people who watch the races on television or the Internet.

Third, though air travel may be restored by Friday, people in areas with severe storm damage may cancel their plans to attend the Breeders’ Cup.

The main effects of Hurricane Sandy on the Breeders’ Cup are most likely to be depressed wagering and television ratings. This would not be the case if the storm affected a less populated geographical area or one in which horse racing was not as popular. But the Eastern seaboard is the most populated region in the United States and New York is the American center of horse racing.

The 2012 Breeders’ Cup was not particularly attractive to begin with, owing to the absence of one or more big-name horses. Coupled with the fallout from Hurricane Sandy, this means that increases in the size of the handle and television audience for the event do not look promising.

Moreover, the quality of the competition will be diminished if East Coast horses cannot be transported to Los Angeles in time.

If the Breeders’ Cup overcomes these obstacles—and shows increases in handle and the TV ratings—that will be quite an achievement. Here’s hoping that happens.

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I’m sure that the people suffering from Storm Sandy are on the minds of most racing fans. It would be helpful, at least in a small way, to match a portion of the money one bets on Friday and Saturday, and send that money to the Red Cross or other such reputable rescue organization. Maybe all of the owners, trainers, and jockeys of Breeders’ Cup races would pledge, in advance, to devote five or ten percent of their winnings to relief efforts.

Copyright © 2012 Horse Racing Business

The scheduled termination of Ontario’s slots-at-racetracks program by the province’s ruling party glaringly demonstrates the tenuous alliance between horse racing and video lottery terminals (VLTs). Governors and legislators in several American states that presently channel a percentage of slots proceeds to purses are also questioning the wisdom of continuing to do so.

Augmenting purses with VLT revenues is almost surely not a long-term solution to compensate for waning pari-mutuel handle because what government gives government can take away. In a time of growing state fiscal crises, it will be increasingly difficult for racing advocates to make the argument that racing should be underwritten in order to support the underlying agribusiness.

An executive in charge of a racetrack would assuredly make a business decision to accept VLTs if proffered; when pari-mutuel wagering declines, slots provide a different source of income. In the short term, racehorse owners and breeders would also be better off with VLTs, since purses would be improved.

The stagnation of pari-mutuel wagering in North America is a result of intense pressure from an assortment of gaming and entertainment enterprises. The quasi-monopoly that racetracks once enjoyed was a golden goose while it lasted, but when gaming alternatives proliferated, the former racetrack monopolists struggled to compete and ceded the lion’s share of the market.

Similarly, today, VLT subsidies to racing tend to provide a false sense of security from external forces. Hence racetrack executives do not have the same degree of urgency, as they otherwise would, to make the pari-mutuel product more attractive.

The dilemma for racing interests is that what is best for the industry in the short term is likely not what is best for it in the long term. One could find solace in the oft-quoted stoic view of John Maynard Keynes that “The long run is a misleading guide to current affairs…in the long run we are all dead.” That seems to be the majority perspective in racing because the industry has pushed for and embraced VLTs at every opportunity.

Yet events in Ontario and elsewhere portend that the long run has arrived, or is looming, in several important venues. Consequently, the racing enterprise in North America will, of necessity, become less and less dependent on VLT subsidies and the pari-mutuel product will have to succeed on its own. Racetracks that offer customers an attractive pari-mutuel value proposition and ambiance will endure and racetracks that do not will vanish.

The denouement is likely to be a considerably downsized but markedly stronger racing and breeding industry capable of standing, economically, on its own merits.

Copyright © 2012 The Blood-Horse and originally published therein. Used with permission.

Although the attention of the racing world has recently been focused on Royal Ascot and the sensational and undefeated Frankel, a developing story about another esteemed horse is also intriguing.

The beloved Paul Nicholls-trained chasing superstar Kauto Star appears by no means sure to be gracing the racing scene this winter if the uncertainty about his future expressed by the champion trainer at Wincanton last week is anything to go by.

The 12-year-old’s legions of fans have been eagerly anticipating his return to the fray with the Grade 1 Betfair Chase at Haydock towards the end of November (a race he won for the fourth time when improbably beating the then-reigning Cheltenham Gold Cup holder Long Run in a memorable renewal last season) expected to be the first port of call in what is generally assumed to be his swansong campaign.

But Nicholls has rather thrown a spanner into the works by clearly looking undecided as to whether or not to race on with the winner of a remarkable 23 of his 41 starts, including two Cheltenham Gold Cups and no less than five King George VI Chases. Speaking to Nick Luck on Racing UK, the man who has seen Kauto Star through all his scintillating successes in Britain and Ireland since he arrived at Ditcheat as a four-year-old from France way back in 2004, was notably non-committal for one so famously sure of himself when it comes to his racehorses.

In the past, Nicholls has laughed off suggestions of retirement for the gelded son of Village Star and was pilloried in some quarters after he insisted the horse should race on into last season, having ended the previous term looking something of a former glory when pulled up in the Punchestown Gold Cup. This time around all Nicholls would say was that he would have to discuss the matter at length with Kauto Star’s owner Clive Smith before coming to any decision, and appeared far from convincing when asked if the old horse still has what it takes to prove a force at the highest level.

Clearly wanting to do what is right for the horse and obviously conscious of the danger of injuring an equine superstar, who has become “public property,” Nicholls’ comments prompted Kauto Star’s odds in the ante-post market for this year’s King George VI Chase to be pushed out to a general 10/1 in a book headed by his old adversary Long Run, who is a top priced 4/1 favorite.

Copyright © 2012 Horse Racing Business